The boom of e-commerce in Covid-19 era

The digital economy in Malaysia is expected to continue to be on a growth momentum


THE Covid-19 pandemic has forever changed the retailing industry, and one of the main shifts seen has been on the e-commerce sector, with stupendous growth just within a short time frame.

Forbes noted that the pandemic accelerated e-commerce by four to six years in the US, while news channel CNBC said the boom of the sector in South-East Asia will continue to stay even after the pandemic ends.

Lazada Malaysia was one platform that took off this year, having millions of orders placed and an increase of 80% on average compared to pre-pandemic.

Its CEO Leo Chow said the platform saw consistent growth across the entirety of 2020 compared to last year, with the fastest-growing month recording a sales uplift of almost 120% year-on-year (YoY) and an 80% increase YoY in daily active buyers.

“This shows us that online shopping is here to stay and has become a pervasive cultural phenomenon which is entrenched in the daily lifestyle of Malaysia’s new normal.

“The digital economy in Malaysia is expected to continue to be on a growth momentum and the uptrend is showing no signs of slowing down next year,” he said to The Malaysian Reserve (TMR) in an interview recently.

According to Chow, this was especially true for small and medium enterprises (SMEs), who onboarded the platform with an increase of 300%.

“More businesses began to realise the distinct advantage of leveraging e-commerce to diversify revenue streams and to meet the ever-rising demand of online shoppers,” Chow said.

He added that the recent success the platform experienced during the 12.12 Grand Year-End Sale further cemented the testament of just how large online shopping has become.

“Even after numerous record-breaking sales in the past few months, Malaysians kept coming back for more, resulting in Lazada beating last year’s 12.12 first-day sales performance within just half a day, in only 12 hours.

“As we close the year with a bang, we look towards the coming year to be filled with opportunities to augment and enhance our comprehensive e-commerce ecosystem. We aim to continue to help our brands and sellers benefit from Malaysia’s growing digital economy, and as an ally to our local micro and small businesses to reduce their barrier of entry through our ongoing stimulus plans and initiatives,” Chow said.

He said Lazada will continue to redefine the online shopping experience, which will become the benchmark of quality and service in the e-commerce industry, and continue to push the boundaries of technology and innovation as a catalyst for e-commerce development in Malaysia and the region.

As the year wore on, more Malaysians began to get familiar and trust e-commerce more, especially when the lockdowns were implemented, says Ho (pic: TMRpic)

Meanwhile, Shopee Malaysia recorded a boom, not only in traffic and volume, but also in the adoption of local brands.

Its regional MD Ian Ho said brands such as Mamee, Padini, Gamuda Land, Hup Seng, Carsome, Naelofar Hijab, Billion, Al-Ikhsan and many more launched official stores on Shopee this year.

“Many brands and sellers have stepped up digitalisation efforts to capture the growing proportion of online-first consumers.

“This new reliance and acceptance resulted in general traffic to the platform remaining robust for Shopee, giving brands and sellers a steady and strong transaction volume,” he told TMR.

Ho said as the year wore on, more Malaysians began to get familiar and trust e-commerce more, especially when the lockdowns were implemented.

“It became an essential service during the Movement Control Order and people began relying on platforms to get daily necessities as they familiarised themselves.

“For example, when we ran the ring- git-to-ringgit Penjana Shop Malaysia Online campaign with the Finance Ministry and the Malaysia Digital Economy Corp, we noted that each new customer on Shopee that benefitted from the Penjana voucher went on to make four subsequent purchases in August and September,” he said.

The platform also noted an increasing amount of micro-SMEs jumping onboard the platform when times get tough.

A survey conducted by Shopee revealed that despite being fully employed, 35.4% turned to e-commerce as second-and-third-income sources.

“Of the 11,850 sellers surveyed, 5,406 are new entrepreneurs enabled by e-commerce, who cited that their businesses are operated 100% online.

“Of these, 72% are women entrepreneurs and were able to generate RM3,950 on average monthly,” Ho said.

Regionally, Ho said the gross merchandise value for the third quarter of 2020 stood at RM37.7 billion compared to RM18.7 billion for the same quarter last year.

Online orders increased by 130.7% from 321.4 million to 741.6 million for the quarter under review.

Nevertheless, Ho said there are still some challenges observed like digital literacy of the market, which has been noticed from the get-go.

“This is why moving forward we will continue with our free e-commerce education through Shopee University and there are a lot of free materials on the Shopee Education Hub.

“We have also rolled out seller support packages that include store vouchers, advertising benefits and more,” he said.

However, Ho noted that according to industry data, there is still much potential for the Malaysian market in terms of e-commerce adoption.

“The contribution to total retail is still lagging behind the global performance which shows, in Malaysia specifically, there is a massive potential for growth as e-commerce is still in its nascent stages.

“Therefore, we should not rest on our laurels and be too fixated on our growth. Instead, we need to focus on getting better and catching up with the global market,” he said.

Ho added that Shopee’s focus has always been to use technology to better the lives of people whether they are consumers, sellers, or partners.

“We are humbled to be able to be at the forefront of this growth and receive the trust of the market to deliver on their e-commerce needs.

“Overall, we remain optimistic and seek to continue to share the benefits and opportunities of e-commerce with everyone,” Ho noted.